Cabot Energy Plc (LON:CAB) shares gained today after its chief executive Keith Bush told investors that the Canada-focused oil firm’s evolution into a significant producer starts now.
The company, which recently bought-out its Canadian partner to take 100% of its oilfield assets, revealed that production averaged 827 barrels of oil per day through the first half of January, and output for 2017 averaged 400 bopd.
READ: Cabot Energy's latest Canadian sidetrack well exceeds expectations
Thanks to the acquisition, Cabot is now targeting between 1,600 bopd and 2,000 bopd by the end of 2018 - with guidance set at 1,000 bopd to 1,200 bopd on average for the year.
Bush highlighted that achieving the targeted 2018 exit rate would be a material achievement that would deliver “significant positive cashflow benefits”.
Cabot also highlighted that two recently drilled sidetrack wells continue to show a better-than-expected performance.
The 2018 field season has now begun, with the drilling of the first of four new sidetrack wells in the winter work programme currently underway, the programme also include four workovers of existing wells.
READ: Cabot Energy to take full ownership of Canadian assets, raising US$16.5mln of new equity
A further ‘summer’ work programme, to take start in July, is presently being put together with up to six sidetrack wells planned.
Bush said: "2017 validated Cabot's asset rejuvenation strategy and demonstrated the Company's ability to execute operationally.
“The next phase of the company's evolution into a significant production company begins now, with a strengthened balance sheet, growing production and a supportive shareholder base.
“Oil production is approximately three times higher than at the same time last year, the company is fully financed for the 2018 Canadian investment programme and the 2018 drilling programme is already underway.”
He added: “The focus for 2018 will be to repeat the success of our recent sidetrack wells in Canada, with up to an additional 10 wells planned during the year, while continuing to invest in the facilities to sustain the levels of production that the subsurface can deliver.”
Cabot still holds interests in Italy, where the Civita gas field is yielding around 130 barrels of oil equivalent per day.
In late afternoon trading, Cabot Energy shares were up over 4% at 5.38p.
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